THE Bangladesh Bank’s appointing observers to Islami Bank Bangladesh Ltd and First Security Islami Bank Ltd in the wake of large loan scams appears delayed. The central bank on December 12 appointed its foreign exchange reserve and treasury management director to Islami Bank and payment services department director to Fast Security Islami Bank as observers, to look into proceedings of the banks, make observations to the board chairs, in cases of irregularities, and notify the central bank. The appointment is delayed as the two banks have already run into large loan scams in which shell companies have embezzled money and some prominent companies taken out loans far in excess of what they get. The Bangladesh Bank appointed an observer to Islami Bank in 2010 but withdrew the observer in 2020. The next two years have been the time for large-scale irregularities in loan disbursement. It, therefore, appears that the withdrawal of the observer has helped some quarters to embezzle a huge amount of money from the bank.
A number of loan scams are reported to have taken place at Islami Bank, Fast Security Islami Bank and other banks. Islami Bank disbursed Tk 6,835.5 crore in loans to eight companies, some existing only on paper, in April 25–November 17. In November, the bank sanctioned Tk 2,460 crore in loans in 17 days, which appears unusual by any standard….
